You recently went to work for Allied Components Company, a supplier of auto repair parts used in the after-market with products from Daimler, Chrysler, Ford, and other automakers. Your boss, the chief financial officer (CFO), has just handed you the estimated cash flows for two proposed projects. Project Linvolves adding a new item to the firm's ignition system line, it would take some time to build up the market for this product, so the cash inflows would increase over time, Project Sinvolves an add-on to an existing line, and its cash flows would decrease over time. Both projects have 3-year lives because Allied is planning to introduce entirely new models after 3 years Allied's WACC is 10% Cash Flows of Project L & Project S: 0 2 + $60 Project L - $100 Project S - $100 $10 $70 $80 $20 $50 18. Which of the below statements is CORRECT? A) NPV of Project L is higher than the NPV of Project S, also the MIRR of project Lis higher than the MIRR of projects B) Project Sis more preferable than project L. C) NPV of Project S is higher than the NPV of Project L, and the MIRR of project Sis higher than the MIRR of project L. D) Options (B) and (C) are correct E) None of the above. Back Next Page 11 of 12 Never Submit passwords through Google Forms